Did this client have a business - sole proprietorship - before setting up the SCorp?    If yes, maybe this business activity should be reported on the Sched C since client clearly wasn't doing transactions as an SCorp. File the 1120S with zero activity for 2021 then make this client understand what is required for 2022 (payroll, corporate bank account, etc)

Does the client have an SCorp election acceptance letter from IRS?

How did the client have a $20k loss without putting money into the business?